Duke Energy Corp.
(DUK) recently raised the size of its senior notes offering to $1 billion from the originally planned $800 million. Investors lapped up the notes due to their higher yield over US Treasury bonds. The company will use proceeds from the sale to retire commercial paper and for financing its capital expenditure.

Duke Energy issued senior notes totaling $500 million due in 2014 with a 3.95% coupon rate semi-annually and another $500 million due in 2019 with 5.05% coupon rate annually.

The company needs funds for its ongoing capital expenditures. Duke Energy is currently expanding its Cliffside Steam Plant on the border of Cleveland and Rutherford counties and a new plant at Edwardsport gasified-coal facility in Indiana.

The company is also investing to control carbon dioxide emissions from its coal-based plants. This is vital in the light of recent progress in the American Clean Energy and Security Act that stipulates stringent caps against such emissions.

Based in Charlotte, North Carolina, Duke Energy is a diversified energy company. It supplies electricity to nearly 4 million US customers. It has approximately 36,000MW of electricity generating capacity in the Midwest and the Carolinas. We have a Neutral recommendation on the shares of Duke Energy.

Read the full analyst report on “DUK”
Zacks Investment Research